Two Techniques, One Linear Wage Curve

10 Pages Posted: 16 Nov 2017  

Robert L. Vienneau

Independent

Date Written: November 13, 2017

Abstract

This note demonstrates that the special case condition, needed for a simple labor theory of value, of equal organic compositions of capital does not suffice to determine technology. Prices do not vary across techniques for both techniques in a numeric example of a two-commodity linear model of production, and they are proportional to labor values. Both techniques yield the same wage curve, in which the wage is an affine function of the rate of profits. This indeterminancy generalizes to models with more than two produced commodities.

Keywords: Labor Theory of Value, Transformation Problem, Choice of Technique

JEL Classification: B51, C67, D24

Suggested Citation

Vienneau, Robert L., Two Techniques, One Linear Wage Curve (November 13, 2017). Available at SSRN: https://ssrn.com/abstract=3070269 or http://dx.doi.org/10.2139/ssrn.3070269

Robert L. Vienneau (Contact Author)

Independent ( email )

209 Maple Street
Rome, NY 13440
315-336-5417 (Phone)
315-334-4964 (Fax)

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